Is Kwasi Kwarteng ready to save the British economy?
What do we know about ‘Black Boris’, as he was enthusiastically dubbed by his own campaign team in his constituency of Spelthorne? And is it up to the task of tackling the worst economic crisis since the late 1970s?
Kwarteng is as close to Truss as you can get in the competitive game of politics. They were born in the same year, 1975, belong to the same parliamentary term, 2010, and live a few blocks from each other in south-east London. They are so ideologically aligned that they co-wrote a pamphlet, “Britannia Unchained”, with two other members of their 2010 cohort, Dominic Raab and Chris Skidmore.
Their partnership would be a stark contrast to the poor relationship between Number 10 (the Prime Minister’s Office) and Number 11 (the Chancellor) of recent years. Rishi Sunak balked at Boris Johnson’s indifference to balancing the books, Sajid Javid resigned when Johnson claimed the right to appoint his advisers, and Theresa May and Philip Hammond were barely on good terms. If Kwarteng becomes Chancellor, we will see a return to the friendlier days of David Cameron and George Osborne.
Kwarteng is an odd mix of the conventional and the unconventional in Conservative politics. He is the product of two of the Tory’s big factories – Eton and Cambridge – but is also the son of Ghanaian immigrants who called him by a traditional Ashanti first name (although, oddly enough, ‘Kwasi’ means ‘born on Sunday’ when Kwarteng was actually born on a Monday).
By temperament, Kwarteng is a social creature who, before the demands of high office and parenthood took their toll, could often be found dining at the familiar watering holes of the conservative world such as the Beefsteak Club or Carlton Club. His intelligent conversation and booming belly laugh made him a popular companion. But he is also a natural scholar who likes to rummage through libraries. In her Diary of an MP’s Wife, Sasha Swire describes him as “essentially an academic; he is enthusiastic and pompous, and barely breathes”, which is not nice with his style of conversation but with his erudite side.
Affability aside, Kwarteng is defined by two things. The first is his great intelligence. Kwarteng belongs to the “big brain” rather than the “large acres” side of the Etonian equation: he was a king’s scholar (meaning he lived with other king’s scholars at the university and he paid reduced fees) but, unlike that other well-known King’s Scholar, Boris Johnson, he took university life seriously, winning the school’s first prize, the Newcastle, followed by a scholarship to Trinity College from Cambridge, a double first (highest honours) in history and classics, a scholarship to Harvard, then a return to Cambridge to take a doctorate in financial history.
He has also published two heavyweight books, ‘Ghosts of Empire’, about the legacy of empire in today’s world, and ‘War and Gold’, which, in his own words, ‘aspires to be a History of Money in the Modern Era”. as well as shorter volumes.
The second notable feature is its right-wing politics. In the Tories’ perpetual war between the ‘wet’ and the ‘dry’, over how to compromise with the Liberal agenda on public spending and crime, Kwarteng has never been mistaken for a ‘wet’. His worldview was shaped by Margaret Thatcher, who was Prime Minister from the time he was four until he passed his GCSE.
Upon arriving in Parliament in 2010, he made it clear he had no sympathy for David Cameron’s brand of compassionate conservatism, and instead cast his spell with a group of other young MPs, including Truss, who believed that the party should return to the true faith. Unlike Truss, however, he never dithered on Brexit, voting to leave the European Union in 2016, criticizing Theresa May’s pragmatism and voting for Johnson and her promise to “get Brexit done”.
Besides his faith in the markets, Kwarteng’s views are shaped by his admiration for fast-growing Southeast Asian states and his worries about the West’s reliance on debt. “Britannia Unchained” is full of references to the work ethic and educational achievements of Singaporeans and Chinese. “War and Gold” worries that debt financing has gone from its original Keynesian function, as an emergency measure during recessions, to a condition of life.
I suspect this is all driven by a pessimistic belief that the West is in secular decline, addicted to spending money it doesn’t have, while Asia is on the rise, thanks to a fierce commitment towards work and education, and that it is the job of responsible Western politicians to wake up their countries.
Is Kwarteng up to the job of Prime Minister of Finance, should he become Britain’s first black Chancellor of the Exchequer? The role could hardly be more demanding, given that the current cost-of-living crisis pales in comparison to what is likely to unfold this winter and the war in Ukraine is settling into a prolonged stalemate.
British journalist Nick Robinson raised a possible criticism – that he’s halfway too smart, in this telling British phrase. Kenneth Clarke, a former chancellor, once argued that politics is the ideal profession for people with second-rate minds, and that those with first-rate minds, like Enoch Powell and Sir Keith Joseph, usually end up do a lot of things. This is absurd: there have been many smart politicians such as Harold Wilson or Roy Jenkins who have been good at their jobs. The problem with Powell and Joseph had more to do with temperament than intellect.
A more reasonable criticism is that Kwarteng is too ideological. He certainly allowed ideology to take over his judgement. Ahead of the 2017 election, for example, he predicted a landslide victory for the Tories, blind to the surge in support for Labor’s Jeremy Corbyn that nearly brought him to Downing Street. More recently, he was a staunch supporter of Owen Paterson, the North Shropshire rule-breaking MP whose downfall arguably precipitated Johnson’s departure. But, unlike other members of his clique, he can tap into a wider variety of resources than just ideology.
In his recent book on leadership, Henry Kissinger recommends that politicians read more history, as it gives them a sense of perspective and nuance. Kwarteng’s history of money puts our current problems in the context of the past 500 years, while its history of the British Empire shows that they were different things in different times and places. As business secretary, Kwarteng matured and adopted more pragmatic views. Although he is not a diehard supporter of industrial policy, he recognizes that governments can play a positive role in laying the foundations for economic activities and addressing externalities such as setting net zero emissions targets.
Everything will depend on the type of leadership provided by Liz Truss and the type of firm she creates. Will she recognize that new times call for new policies? Or will it simply serve reheated Thatcherism? Will she create a Cabinet in which guiding assumptions are tested and different voices heard? Or will she follow Boris Johnson’s lead in appointing a Cabinet of Lightweights?
Put in the right context, Kwarteng’s obvious qualities – his powerful intellect and big personality – could become a valuable asset. Put in the wrong – blind leadership and stupid colleagues – the same traits could drive the country to the brink with remarkable speed.
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Adrian Wooldridge is a global economics columnist for Bloomberg Opinion. A former writer at The Economist, he is the author, most recently, of “The Aristocracy of Talent: How Meritocracy Made the Modern World”.
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